Shares in food manufacturer Premier Foods rose 21% to close on 32.75p yesterday buoyed by strong results from rival Associated British Foods.

ABF said profits were up by more than a quarter (27%) at its grocery division, with an "enormously encouraging" improvement at its Allied Bakeries business.

And although Marks & Spencer unveiled a 5.3% drop in half-year food sales, analysts said the figures were better than expected and would boost Premier because M&S accounts for about 10% of Premier's supply business.

Premier’s shares nosedived last month following fears over the company’s high debt levels. However, it assured investors it would meet its financial covenants.

Since then a number of Premier’s directors have upped their stake in the business, including CEO Robert Schofield.